Anyone not taking google seriously is an idiot...I don't care if they are bidding mathematical constants or not. Google isn't always successful but they are very sharp competitors with very good top management.

Apple won this round for sure but you guys are petty fans even in victory by taking one very minor aspect and blowing it up to be some huge indicator of Google competence.

And I think that you might be assuming too much about Google's competence here. We can look at several companies in severe decline, that just a few years ago were thought to be extremely well led, but proved not to be. Motorola, Nokia, and RIM are but a few that had their time in the sun, but are now in a state of decline. These things play out over years, so we don't always know when it started until afterwards.

I'm not saying that this is the case for Google now, but neither can you state that it isn't. If somehow, Android loses it's growing dominance, and that can be traced back to their failure to obtain these patents, then it will be said that management didn't understand their importance, and what was happening around them. If Android continues its rise for years to come, the it will be seen differently, but right now, Google's attitude is puzzling. They've been making very confusing statements and moves.

No, my agenda is to try to get it through to people who should be intelligent enough to understand it that their analysis is grossly oversimplified. I have no idea who 'won' the auction, moreover unlike you I am happy to admit it.

You are the ones with certainty that lacks evidence, I'm the one presenting the case that this issue is nuanced.

I'm sure that the winners and losers in this auction very clearly know who they are. And Schmitt made a statement which you should have read, as it was on all the news and tech sites, about how unfortunate the situation about the result was, and how they were going to look for more IP to buy.

That doesn't read like someone who feels they won. It's definitely the story from a loser.

The error you keep making is in assuming that Apple would be overpaying.

Go find where I said that and quote it, I never once said that Apple has definitely overpaid. You are assuming I'm assuming this.

Quote:

It could be that it was worth much more to Google as well, but that they decided they couldn't afford it.

Well that's clearly not true. We know that Google has the cash to pay more than 4billion, if the Patents were worth more than 5billion to Google then they would have had an expected profit by bidding higher. Google is a huge cash machine with no significant liabilities.

Quote:

You keep insisting that only Google knows how much these patents are worth.

Quote where I keep insisting this? I've said several times, Google has an estimate of their worth to Google and an estimate of their worth to Apple, Apple has its own estimates. Nobody knows the value. But that's the second time you've accused me of stating something that I didn'tr state. Please quote where I stated that only google knew the value, otherwise drop this ridiculous line.

Quote:

You keep insisting that anything over Google's bid is over paying. why is that?

No, I simply say that if Google overbid then they have caused Apple to pay more than the value of the patents to Google. In that instance Google has reduced the net present value of the asset to Apple, even if it hasn't pushed it negative.

That is all I'm saying. Not that Google are clairvoyant, or omniscient, or any of the ridiculous things you keep saying.

Next time you think I'm saying something ridiculous QUOTE WHERE I SAY IT.

Quote:

You keep putting words in my mouth. I never said that Google wouldn't over bid.

Yes you did, and I'll quote it, you said.

Quote:

Originally Posted by melgross

And what if Google was wrong, and ended up paying hundreds of millions more themselves? It would have backfired if they didn't think that price was worth it. I think we can safely put that argument to rest.

How do you parse that other than it is you saying that we can dismiss the possibility that Google would intentionally overbid? Or how about

Quote:

Originally Posted by melgross

What would have happened if Google bid much more than they originally wanted (which looks to be the case anyway), and won? You don't bluff at these things.

Sorry but unlike you, I'm not ascribing any opinion to you other than the ones that you clearly state.

Quote:

You have an amazing ability to take what others say, and twist it around so that it bears no relation to it

You are projecting.

So let's get this clear. I've said numerous times that Google might have chosen to overbid, and I have been roundly criticized for saying it. You are now claiming that you agree that they might have overbid? Or are you still saying that they definitively didn't overbid after just claiming that you didn't say it?

I think we need to get this clear because at this point, in addition to completely misrepresenting what I'm saying, you seem also to be completely misrepresenting what you're saying.

Go find where I said that and quote it, I never once said that Apple has definitely overpaid. You are assuming I'm assuming this.

I'll give some of it, but reading through almost 300 posts to find every quote is a bit much to ask.

"Solipsism is absolutely right when he said that part of the point for Google is to make competitors overpay."

"If Google is close to X their final figure then they WANT Rockstar to bury them, because that means Rockstar just overbid and payed far more for the asset than it's worth."

"You're right I misspoke -the statement should have read that means Rockstar just overbid and payed far more for the asset than was necessary."

"And when your group has higher perceived need for the Asset the higher your competitor can safely drive the price. Surely that's clear?"

"Exactly, which is precisely why Google could, should and probably did continue bidding long after they'd passed the value of the Patents to themselves. "

"Sometimes in game theory, even if I cannot win I can and should at least ensure that you also lose."

I'll stop here. We can see the trend in your thinking, even if you can not. By putting the word"definitively" into the sentence, you think you can avoid all that you've said, but you can't.

Quote:

Well that's clearly not true. We know that Google has the cash to pay more than 4billion, if the Patents were worth more than 5billion to Google then they would have had an expected profit by bidding higher. Google is a huge cash machine with no significant liabilities.

Having the cash doesn't mean that you think you can spend more than a certain part of it. Do we know Google's plans for that cash? No, we don't. So it's very possible that they didn't think they could afford something they felt that they needed.

Quote:

Quote where I keep insisting this? I've said several times, Google has an estimate of their worth to Google and an estimate of their worth to Apple, Apple has its own estimates. Nobody knows the value. But that's the second time you've accused me of stating something that I didn'tr state. Please quote where I stated that only google knew the value, otherwise drop this ridiculous line.

Ok, you did state that, but then gave it up, as in a clip from one of your posts above.

Quote:

No, I simply say that if Google overbid then they have caused Apple to pay more than the value of the patents to Google. In that instance Google has reduced the net present value of the asset to Apple, even if it hasn't pushed it negative.

From the quotes above, you were saying that.

Quote:

Next time you think I'm saying something ridiculous QUOTE WHERE I SAY IT.

I have, a number of times.

Quote:

Yes you did, and I'll quote it, you said.

I'll put your quote of what I said in here so we can all see it in context:

"Quote:
You keep putting words in my mouth. I never said that Google wouldn't over bid."

And then:

"Quote:
And what if Google was wrong, and ended up paying hundreds of millions more themselves? It would have backfired if they didn't think that price was worth it. I think we can safely put that argument to rest."

And where in those two quotes you posted did I say that Google wouldn't overbid? What I said that they wouldn't intentionally attempt to get Apple to overpay. I've said in other posts that Google could overbid, but not for that purpose, perhaps in error.

Quote:

How do you parse that other than it is you saying that we can dismiss the possibility that Google would intentionally overbid? Or how about

Sorry but unlike you, I'm not ascribing any opinion to you other than the ones that you clearly state.

Wow! You try to take a response to your assertion that Google probably overbid to cause Apple to pay more, where I'm asking what would have happened if that happened, as my saying it happened, or didn't happen? I'm not saying either thing. I'm questioning what would have happened, which is why I wrote all of those comments as questions?

[quote
You are projecting.

I'm simply stating what you're doing.

Quote:

So let's get this clear. I've said numerous times that Google might have chosen to overbid, and I have been roundly criticized for saying it. You are now claiming that you agree that they might have overbid? Or are you still saying that they definitively didn't overbid after just claiming that you didn't say it?

I think we need to get this clear because at this point, in addition to completely misrepresenting what I'm saying, you seem also to be completely misrepresenting what you're saying.

What I'm saying is that I think it's unlikely that Google would have raised their bid above what they were willing to pay. This is what I've always said. Is that definite? Of course not. We can't get into their heads. But it's unlikely they would have done that. We both agree that it's dangerous, because it might not work.

I've quoted you a number of times, so it can be seen by others, even if you don't agree, that what I and others have been ascribing to you is correct, no matter how much you may deny it.

I simply asked you a question, rather than stating you said something that you did not. As is becoming all too common, you're avoiding an answer again, something for which you've become known on this forum.

You asked a question that implied I was saying something I wasn't, and which was entirely irrelevant to the discussion. Something for which you've become known on this forum.

I just posted several detail paragraphs presenting my case. You presented a strawman. and I'm the guy with no case?

Sorry to break it to you but I have a case, you just don't like it. You on other hand have beliefs, approaching the religious level, which presumably explains your righteous anger that I fail to share them.

Google crying foul clearly shows they think they lost big time. But, since Google were "colluding" with Intel, it's rather disingenuous of them, just like paying you to come here and propagandize for them.

FRAND is not an automatic payment machine. Usually, the companies with the patents declare FRAND themselves, to force others to pay up. Sometimes, as with Apple now, they've got some patents that others desperately want to license, and that a company doesn't want to license, so those others attempt to declare FRAND, but it doesn't always work. I know of a lot of patents over the decades in various industries that were considered to be indispensable, but weren't licensed by the holders. In fact most patents are considered to be indispensable, but aren't licensed.

I didn't state that FRAND was an "automatic payment machine". Just that patents required by LTE are likely available under FRAND. Why? Because the patents were purchased by a consortium, are core to LTE, probably will be required to be by regulatory bodies as part of the sale and was originally promised by Nortel under FRAND for a 1% fee.

If your patent is indispensable and not licensed then it likely won't get accepted by a standards body since no one but you can use it or the "standard" itself doesn't get widely used since...you guessed it...nobody but you can use it.

And I think that you might be assuming too much about Google's competence here. We can look at several companies in severe decline, that just a few years ago were thought to be extremely well led, but proved not to be. Motorola, Nokia, and RIM are but a few that had their time in the sun, but are now in a state of decline. These things play out over years, so we don't always know when it started until afterwards.

There are zero indications that Google is in any more decline than Apple. If anything Apple is of far greater risk of decline once Jobs retires.

Quote:

I'm not saying that this is the case for Google now, but neither can you state that it isn't.

Right...because both are of equal probability. Not. I sure as hell can state that Google isn't in a state of decline with a MUCH higher level of confidence than any idiotic claim that Google is in decline.

Quote:

If somehow, Android loses it's growing dominance, and that can be traced back to their failure to obtain these patents, then it will be said that management didn't understand their importance, and what was happening around them. If Android continues its rise for years to come, the it will be seen differently, but right now, Google's attitude is puzzling. They've been making very confusing statements and moves.

These patents have a certain strategic value. Google determined this to be $4B. Good management has sufficient willpower not to keep bidding past prudence...even if it is "only" half a billion more. Which it wouldn't have been given that Apple's consortium was far larger than Google's and could have kept bidding past that $4.5B mark without actually individually spending $4B.

I didn't state that FRAND was an "automatic payment machine". Just that patents required by LTE are likely available under FRAND. Why? Because the patents were purchased by a consortium, are core to LTE, probably will be required to be by regulatory bodies as part of the sale and was originally promised by Nortel under FRAND for a 1% fee.

If your patent is indispensable and not licensed then it likely won't get accepted by a standards body since no one but you can use it or the "standard" itself doesn't get widely used since...you guessed it...nobody but you can use it.

Sure. But that assumes that you want it to be accepted by a standards body. In Apple's case, often they want the patents for their own devices. If they have a better way of doing something, that doesn't make it indispensable, though it might make it very desirable.

There are zero indications that Google is in any more decline than Apple. If anything Apple is of far greater risk of decline once Jobs retires.

Right...because both are of equal probability. Not. I sure as hell can state that Google isn't in a state of decline with a MUCH higher level of confidence than any idiotic claim that Google is in decline.

These patents have a certain strategic value. Google determined this to be $4B. Good management has sufficient willpower not to keep bidding past prudence...even if it is "only" half a billion more. Which it wouldn't have been given that Apple's consortium was far larger than Google's and could have kept bidding past that $4.5B mark without actually individually spending $4B.

I'm not saying that Google is in decline. But you're making too many assumptions in regards to them not being so. What happens if the government here and in Europe decide that Google is abusing its position? What happens if Baidu moves out of China, and challenges them throughout Asia? There are a lot of scenarios that could result in Google losing its dominance.

Will that happen? Who knows, but it could. apple could lose too of course, but we're talking about Google.

For those interested in the letter from the American Antitrust Institute stating their concerns with the recent Rockstar Bidco auction win. As far as I can tell they have no undeclared agendas, and have previously voiced concerns with some Google buys. They look fair and non-biased to me.

Now lets remember the story so far. You're trying to prove that you were justified in saying

Quote: "The error you keep making is in assuming that Apple would be overpaying."
and
Quote: "You keep insisting that only Google knows how much these patents are worth."
and
Quote: "You keep insisting that anything over Google's bid is over paying. why is that?"

Let's see how you did, first you quoted a lot of places where I said that Apple might have overpaid, or even said something completely different then you admitted.

Quote:

Originally Posted by melgross

I'll stop here. We can see the trend in your thinking, even if you can not. By putting the word"definitively" into the sentence, you think you can avoid all that you've said, but you can't.
...
I've quoted you a number of times, so it can be seen by others, even if you don't agree, that what I and others have been ascribing to you is correct, no matter how much you may deny it.

Let me get this right because I'd like to be clear. You know what I'm thinking but I don't? If I repeatedly say that I think that Google probably, possibly or maybe intentionally overbid in order to make Apple pay more than they otherwise would have - you think that means that I assume that Apple overbid? When I said 'Exactly, which is precisely why Google could, should and probably did continue bidding long after they'd passed the value of the Patents to themselves.' - I meant that Apple overbid somehow without even mentioning them? If I say that in some circumstance X that Apple overbid that means that I assume Apple overbid?

Do you really want to stick to that? Wouldn't it be better to just accept that you grossly misquoted me because you kept reading what you thought I was saying and not what I was actually saying?

Let's go on to the second point. Even though I apparently 'keep insisting' that Google has perfect knowledge you in fact could only find one place where I'd stated it, accidentally and subsequently corrected my statement precisely to avoid being so misconstrued.

Perhaps you aren't a native english speaker, but the word 'keep' in this context connotes repetition, and the word 'insisting' is rather defeated if I withdrew a statement as a typo immediately afterwards. If you think that a single typo allows you to tell somebody that they 'keep insisting' something then I'm no longer surprised that you think that repeated expressions of uncertainty equal certainty.

You don't even attempt to find quotes to back up your third ridiculous statement.

Now let's see your claims that I'm being unfair and putting words into your mouth, this time with a bit more of the context than you included - my additions in bold.

Quote:

"Quote:
Suppose Apple believe that there is no possibility that Google will overbid, as you apparently do. Apple also believe that the patents must be more valuable to Apple than they are to Google, as you also do. Therefore Apple must always outbid Google, which you have said is an unreasonable assumption. Something here clearly isn't right, and it's the assumption that you should never overbid.

"Quote:
You keep putting words in my mouth. I never said that Google wouldn't over bid. I also never said that they would.

It's plain from the sense of my paragraph that I am talking of the case of Google intentionally overbidding, and that I assume that you believe that Google would never intentionally overbid. That's made quite clear by the last line, 'should' would make no sense in the case of accidental overbids.

Even more tellingly there's that ridiculous claim you make that I keep insisting Google has perfect knowledge of the asset value. Since you believe that I think that, in your view I can't possibly mean that Google would accidentally overbid, since you believe that I think that impossible. Confusing perhaps, but there you are. You according to your own stated beliefs of my opinions couldn't misinterpret my statement, except intentionally.

Now your only wriggle room is closed I'm afraid. If you claim you meant that Google would never intentionally overbid but might accidentally overbid then in the context of my statement, I was correctly stating your view - and at worst you could insist that i insert a redundant 'intentionally' into the statement. The entire argument hangs together just as well with it in there. If you claim that you merely think it unlikely that Google would overbid then the quotes damn you- because you say that we can 'put the argument to rest' that they would do so, and that 'you don't bluff at these things'. Given that if I said 'You generally/probably/mostly/maybe don't bluff' you'd consider that a definite assumption, I think your failure to in anyway hedge allows me to ascribe certainty, don't you?

So why don't you be a man here and accept that you have been putting words into my mouth and I have not been putting words into yours. Then we can get on with disagreeing about the actual matters, which is surely more fun than me continuing to tie you in these knots. You will grow as a person when you learn to admit these errors.

Quote:

What I'm saying is that I think it's unlikely that Google would have raised their bid above what they were willing to pay. This is what I've always said. Is that definite? Of course not. We can't get into their heads. But it's unlikely they would have done that. We both agree that it's dangerous, because it might not work.

Why is it unlikely that they would intentionally overbid? Let's assume for sake of simplicity that the estimates of the value of the patents are G and A to google and apple respectively, and for the sake of simplicity assume they both have the same estimates.

A simple model for the payoff in this game is that Google score (G-B) if they win with a bid of B, or -(A-B) if Apple wins with a bid of A, and Apple scores the opposite - ie. a strict zero-sum game. Let's also assume that A > G. In fact let's make A 4 and G 2. In this simple case google should bid up to 3 to minimize their loss. What if we relax the zero sum restriction? If Google's score is proportional to -Apple's score at all then they should bid more than G, only if google considers its score 0 upon losing the auction does it make sense for them to not intentionally overbid.

And this is in the simplified case where both the parties have the same estimates. As soon as you introduce doubt regarding that the game becomes yet more complicated because true bluffing starts to be relevant.

Not overbidding is in many ways as dangerous as overbidding. The money that your opponent is saving as a result will be spent to buy other assets that will be used against you - it's quite likely that more patent pools will be coming onto the market - especially with RIM and Nokia fading fast, and Moto on their last legs.

Sure. But that assumes that you want it to be accepted by a standards body. In Apple's case, often they want the patents for their own devices. If they have a better way of doing something, that doesn't make it indispensable, though it might make it very desirable.

Which part of LTE is confusing you? Unless you wish to pursue the concept that Apple is about to build it's own competing mobile network standard your counter argument has no merit other than to avoid either dropping the issue gracefully or conceding that my point was correct.

Apple is NOT going to use the LTE specific patents to keep manufacturers from making LTE phones. The result of the patents will make iPhones slightly less to make because the FRAND royalties will probably be set to be more than Nortel's $1/handset...as much as Apple thinks it can get away with without inviting regulatory reaction.

The high purchase price might even help...the patent pool sold for 3 times expectations so it can be argued that Nortel undervalued the patent values at $1/handset and it should be $3/handset. Oh gee, RIM has a license and MS might have enough rights to convey a license under WP7. That also gives a slight edge to the other handset makers in the consortium that make Android phones but AFAIK Samsung, HTC and Moto aren't in that group. Sony and Ericsson are.

Which is pretty much ideal. See, we're not singling out Android, Sony & Sony-Ericsson are part of the consortium making plenty of Android phones and $3/handset to all comers is a fair and non-discriminatory price.

This isn't a game ender for Android but keep chipping away at licensing costs and it helps WP7 immensely. Splitting the markets 30% Android, 20% WP7, 30% iOS, 10% other is a huge strategic win for Apple and a potentially huge strategic loss for Google...all that needs to happen is Bing becoming the default search for iOS and Google just lost a huge gamble by competing with their partners.

This is why this is disappointing for Google but not devastating. There's still a lot of chipping away that needs to be done and Android still has a huge lead on WP7. Personally I like WP7 better but it still needs one more mango sized update.

Yes you are by implying both states are equally possible. It isn't...and claiming "who knows what will happen" is simply a dodge.

Quote:

But you're making too many assumptions in regards to them not being so. What happens if the government here and in Europe decide that Google is abusing its position? What happens if Baidu moves out of China, and challenges them throughout Asia? There are a lot of scenarios that could result in Google losing its dominance.

Will that happen? Who knows, but it could. apple could lose too of course, but we're talking about Google.

I'm not saying that UFOs exist. But you're making too many assumptions in regards to them not existing. What happens if the government here and in Europe have been hiding the existence of UFOs, like in Area 51? Governments are real secretive so you never REALLY know. What happens if UFOs appear circling Washington like they did In Mexico? There are a lot of scenarios that where UFOs could exist.

Will that happen? Who knows, but it could.

But, hey, I'm not saying that UFOs exist...that's not MY position...but it could be years before we really know the truth.

Yes, the probability that Google is in decline in 2011 is much higher than the existence of UFOs in secret government bases 2011. A very very small probability is still much higher than essentially zero.

And where in those two quotes you posted did I say that Google wouldn't overbid? What I said that they wouldn't intentionally attempt to get Apple to overpay. I've said in other posts that Google could overbid, but not for that purpose, perhaps in error.
...
What I'm saying is that I think it's unlikely that Google would have raised their bid above what they were willing to pay. This is what I've always said. Is that definite? Of course not. We can't get into their heads. But it's unlikely they would have done that. We both agree that it's dangerous, because it might not work.

Fact: Google bid beyond the commonly assessed value of the patents.

"Analysts say the Nortel LTE patents normally would be worth as little as $100 million to $200 million, but agree that demand is so strong for them that the Chapter 11 auction could send their value soaring."

"One such figure thats been doing the rounds is $2.9bn, and it may be that Nortel, which looks to be selling its assets off piecemeal, is looking to drive some interest in its 4G IPR. However, Stuart Carlaw, vice president and chief research officer at industry analyst ABI Research suggests that this figure is somewhat overblown."

So any bid over $2.9B is "overpaying" even accounting for the assessed strategic value by market analysts.

Fact: The bidding started with a high Stalking Horse bid to prevent lowballs. $900M for $100M-$200M of actual value is already an indicator that Google wanted to push valuation far beyond the likely real dollar value of the patents.

It's true that Google likely never bid beyond what they were willing to pay ($4B). That in no way indicates that they wouldn't bid in a manner to make Apple overpay even if the outcome is they ended up owning the patents at an inflated price.

Especially since that was guaranteed the moment they made the $900M stalking horse bid.

There is no way in hell the Rockstar consortium will ever see $4.5B in revenue out of those patents.

So did Rockstar overpay? Hell yes.

Did Apple overpay? Probably not since they only shelled out $2B and they're happy, along with the others, to chip away at Android with more patent royalties and litigation.

If Apple paid $4B, given their patent portfolio is far stronger than Google's, they'd have vastly overpaid where $4B is somewhat reasonable for Google to try to shore up a weak IP hand. Still too much money but justifiable.

In hindsight, Google should have put in a stalking horse bid at $3B and bluffed everyone else. $900M was a bit too small.

Apple is NOT going to use the LTE specific patents to keep manufacturers from making LTE phones. The result of the patents will make iPhones slightly less to make because the FRAND royalties will probably be set to be more than Nortel's $1/handset...as much as Apple thinks it can get away with without inviting regulatory reaction.

The high purchase price might even help...the patent pool sold for 3 times expectations so it can be argued that Nortel undervalued the patent values at $1/handset and it should be $3/handset. Oh gee, RIM has a license and MS might have enough rights to convey a license under WP7. That also gives a slight edge to the other handset makers in the consortium that make Android phones but AFAIK Samsung, HTC and Moto aren't in that group. Sony and Ericsson are.

I would guess that MS license to the LTE patents won't be transferable, since they are hardware patents and won't be part of the OS. 1$ per handset starts to look interesting. Suppose 100mil handsets per year for 10 years (assuming the patents are about halfway through their life) - that would give a valuation of around $1BN - assuming that Apple's cost of capital is around 1%. Given that the global market for all handsets is floating around 1billion/year, it doesn't seem implausible that Apple will turn a profit just on the LTE royalties.